Price, Function Completeness, Backward Compatibility Are the Current Challenges
Reviewing the history of format development, when new technology is newly born, there are always diverse specifications in initial development stages, but eventually these different specifications are usually integrated or a single format wins out. VHS beat Beta by its longer recording time, successful licensing, and market promotion. DVD developed an integrated dual-format of DVD+R/RW and DVD-R/RW, and even super multi-format integrating DVD崇/RW and DVD-RAM.
As the battle between BD and HD DVD is becoming increasingly fierce, the launch of dual-format products resembles the DVD specification battle. The main reason that the five DVD formats were integrated successfully was that the different formats were highly similar in terms of technology, thereby reducing costs and integration difficulties. Each format also had its own distinct market positioning. On the contrary, though BD and HD DVD both use blue-laser technology, the different NA (Numerical Aperture) makes it more difficult to integrate the two specifications and it would either increase cost or lower the yield rate of product. Thus before integration difficulties or cost are significantly reduced, it remains difficult to predict whether the battle of BD and HD DVD will develop towards integration like DVD did.
The key components of dual-format players and burners can currently support dual-format specifications, but the problems are the payment of two royalties and difficulties of integrating the optical pick-up head. These have caused increased costs and low yield rates, and the price of products is 20% higher than BD players. Specifications and price are key factors in influencing consumers' purchase willingness. Currently BD players are selling at US$800-1,000; this price is not attractive to consumers. Dual-format players sell at US$1,200, and they need to lower prices to attract consumers. Thus, controlling cost will be the leading challenge for vendors in the development of this kind of product.
Moreover, the completeness of dual-format products' functionality and backward compatibility are key issues for consumers when deciding to make purchases. Because dual-format burners cannot record HD DVD discs and dual-format players do not have HDi interactive format, it is hard to attract HD DVD users. And consumers who own both blue-laser and DVD players cannot be satisfied with the fact that THD products are not backward compatible.
Future Direction of Competition between Blu-Ray and HD DVD Still Undecided
Dual-format blue-laser products provide an integrated solution, attempting to erase consumers' confusion about the diverse specifications and increase the penetration rate of these products. However, it remains unclear whether these products will be able to replace single-format products and achieve a considerable penetration rate.
In the short term, high difficulty and cost of integrating key components and the royalties create high costs and low yield rate, which result in the high price of products. Also, dual-format products do not yet have complete functionality and backward compatibility, causing consumers to hold of on purchases. If dual-format products cannot replace single-mode products, consumers have to choose form three kinds of blue-laser products. In this way, confusion is not solved; on the contrary, consumers will become even more confused.
In the long term, vendors may be better able to control costs; technology of integrating key components may become easier; and complete dual-format functionality and backward compatibility could also become reality. If the aforementioned things were to happen, dual-format products may be a better choice for consumers when BD and HD DVD are still of equal strength in the market.
However, besides integration of BD and HD DVD formats, a single format winning out still is a possibility. As TVs are developing towards full HD specifications and PCs towards entertainment functions, BD has advantages due to its larger storage capacity. Still, disadvantages of BD products include their high prices and insufficient backward compatibility, which are the reason that these products have not yet become mainstream and are still embroiled in fierce competition with HD DVD products. If BD products can be improved in terms of price and backward compatibility, or if HD DVD products achieve breakthroughs in storage capacity, single-format might win out over the other, and dual-format products will become a transitional product.